EXTON, Pa., Feb. 28, 2012 /PRNewswire/ -- ViroPharma Incorporated (Nasdaq: VPHM) reported today its financial results for the fourth quarter and year ended December 31, 2011.
In 2011, we:
- Achieved a record $544 million in annual net product sales, including $251 million in net sales of Cinryze® (C1 esterase inhibitor [human]), and $289 million in net sales of Vancocin® (Vancomycin Hydrochloride Capsules, USP);
- Attained non-GAAP adjusted net income of $182 million; GAAP net income reached $141 million;
- Delivered positive cash flows from operations of $171 million;
- Utilized $170 million of cash to repurchase 9.2 million shares of ViroPharma stock; and
- Finished the year with working capital of $537 million as of December 31, 2011, including cash, cash equivalents and short-term investments of $460 million.
Net sales were $145.6 million and $544.4 million for the fourth quarter and year ended December 31, 2011, respectively, as compared to $121.6 million and $439.0 million in the comparative periods of 2010, respectively. This represents 20 percent growth in the fourth quarter and 24 percent growth for the year in net product sales. The fourth quarter Cinryze demand was satisfied through net sales of $66.7 million as reported and a reduction in the channel of about a week.
"As evidenced by our financial and operational performance throughout the year, 2011 was clearly the most successful period in the history of our company," stated Vincent Milano, ViroPharma's chief executive officer. "Among the highlights were the approvals and launches of Cinryze and Buccolam® (midazolam, oromucosal solution) in Europe, continued strong growth of Cinryze in the U.S., and the approval of our Vancocin sNDA leading to modernized labeling and, we believe, three years of exclusivity. We also significantly broadened our early stage and commercial pipeline through four separate strategic business development agreements. In 2012, our focus will remain on enhancing brand loyalty for patients who rely on our products, continuing the globalization of our product portfolio, and meeting the evolving needs of patients suffering from serious medical conditions."
Our GAAP net income was $53.2 million in the fourth quarter of 2011 compared to $37.5 million in the 2010 fourth quarter. GAAP diluted earnings per share was $0.65 for the fourth quarter of 2011 compared to $0.43 for the same period in 2010. For the full year in 2011, GAAP net income was $140.7 million compared to $125.6 million of GAAP net income during 2010. GAAP diluted earnings per share was $1.68 for the full year 2011 compared to $1.47 during 2010.
Non-GAAP adjusted net income for the three and twelve months ended December 31, 2011 was $50.6 million and $181.9 million, respectively, compared to $45.3 million and $156.3 million for the same periods in 2010. Non-GAAP adjusted diluted earnings per share was $0.61 for the fourth quarter of 2011 compared to $0.50 for the same period in 2010. Non-GAAP adjusted diluted earnings per share was $2.09 for the full year 2011 compared to $1.76 for the full year 2010. A reconciliation between GAAP and non-GAAP adjusted measures is provided in the Selected Financial Information Non-GAAP Financial Measures Reconciliation table included with this release.
Operating Highlights
Cinryze net sales during the three and twelve months ended December 31, 2011 were $66.7 million and $251.2 million, respectively, a 27 percent and 42 percent increase over the respective periods in 2010 due to an increase in the number of patients receiving Cinryze. Vancocin net sales during the three and twelve months ended December 31, 2011 were $77.8 million and $288.9 million, respectively, or a 15 percent and 11 percent increase over the respective period in 2010 primarily due to net realized price growth during 2011.
Cost of sales increased over the three and twelve month periods in the prior year by $1.7 million and $18.7 million, respectively, primarily due to increased Cinryze volume. The increase in selling, general and administrative expenses of $32.1 million in 2011 compared to 2010 is driven by higher spending related to our European infrastructure and commercialization efforts and new Cinryze marketing programs. Research and development costs increased $26.9 million in 2011 compared to 2010 primarily due to upfront licensing fees and milestone cost under our Halozyme and INS license agreements entered into during the year, which totaled $18.5 million.
We also incurred other operating expenses of approximately of $17.0 million during 2011 which included costs to expand the Cinryze manufacturing capacity at Sanquin, charges to reflect the increase in the fair value of the contingent consideration related to the acquisition of Buccolam of $4.6 million and an $8.5 million impairment charge as a result of the decision to push out development and commercialization plans for the remaining Auralis in-process research and development asset.
Our income tax expense was $67.3 million and $75.3 million for the year ended December 31, 2011 and 2010, respectively. The effective tax rate in 2011 was 32.4 percent compared to 37.5 percent in 2010. The effective tax rate in 2011 reflects the favorable impact of the tax benefits arising from a manufacturing deduction and the utilization of certain Pennsylvania State net operating losses. The effective tax rate in 2010 exceeded the federal statutory tax rate due to state income taxes and certain share-based compensation that is not tax deductible.
Working Capital Highlights
At December 31, 2011, our working capital was $537.3 million compared to $561.0 million at December 31, 2010 as we generated $170.7 million in cash flow from operations and deployed $170.0 million to repurchase 9.2 million shares during 2011.
Looking ahead in 2012
ViroPharma is reiterating its guidance for the year 2012 as a convenience to investors. The following guidance provided by ViroPharma are projections, based upon numerous assumptions, all of which are subject to certain risks and uncertainties. For a discussion of the risks and uncertainties associated with these forward looking statements, please see the Disclosure Notice below.
For the year 2012, ViroPharma expects the following:
- Worldwide net product sales are expected to be $600 to $660 million;
- Net U.S. Cinryze sales are expected to be $310 to $330 million;
- Net Vancocin sales are expected to be $260 to $310 million; and
- Research and development (R&D) and selling, general and administrative (SG&A) expenses are expected to be $230 to $260 million.
Non-GAAP Disclosures
The Company is reporting both GAAP net income and non-GAAP adjusted results for the three and twelve months ended December 31, 2011 and 2010. Non-GAAP adjusted net income is GAAP net income excluding (1) non-cash interest expense, (2) amortization related intangible assets acquired, (3) stock compensation expenses, and (4) certain non-recurring events. Non-GAAP adjusted diluted net income per share reflects the Non-GAAP adjusted net income, after the incremental effect of applying the "if converted" method of accounting to the senior convertible notes, and the diluted shares used in determining our GAAP diluted net income per share. A reconciliation between GAAP and non-GAAP adjusted measures is provided in the Selected Financial Information Non-GAAP Financial Measures Reconciliation table included with this release. The Company believes that its presentation of historical non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. These historical non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. Generally Accepted Accounting Principles.
Conference Call and Webcast
ViroPharma is hosting a live teleconference and webcast with senior management to discuss the financial announcement, guidance, and other business results on February 28, 2012 at 9:00 a.m. Eastern. To participate in the conference call, please dial (800) 874-4559 (domestic) and (302) 607-2019 (international). After placing the call, please tell the operator you wish to join the ViroPharma investor conference call.
Alternatively, the live webcast of the conference call can be accessed via ViroPharma's website at http://www.viropharma.com. Windows Media or Real Player will be needed to access the webcast. An audio archive will be available at the same address until March 11, 2012.
About ViroPharma Incorporated
ViroPharma Incorporated is an international biopharmaceutical company committed to developing and commercializing novel solutions for physician specialists to address unmet medical needs of patients living with diseases that have few if any clinical therapeutic options. ViroPharma is developing a portfolio of therapeutics for rare and Orphan diseases including C1 esterase inhibitor deficiency, Friedreich's Ataxia, adrenal insufficiency; and recurrent C. difficile infection (CDI). Our goal is to provide rewarding careers to employees, to create new standards of care in the way serious diseases are treated, and to build international partnerships with the patients, advocates, and health care professionals we serve. ViroPharma's commercial products address diseases including hereditary angioedema (HAE), seizures and C. difficile-associated diarrhea (CDAD); for full U.S. prescribing information on our products, please download the package inserts at http://www.viropharma.com/Products.aspx; the prescribing information for other countries can be found at www.viropharma.com.
